Austin Energy’s Triple Rate Shock – Look At The Forest And Not The Trees!

By Bill Oakey – November 29, 2022

My view of this rate case is simple and straightforward – It’s a matter of many people involved not seeing the forest for the trees! I look at it like this:

1. Austin Energy asked for a base rate increase back in April.

2. They asked to increase the monthly customer charge by 2 1/2 times, to $25.00. No other major utility in the State has done that! Shouldn’t that raise a huge red flag? Why are people saying that we should “compromise” with a $12.00 customer charge? $10.00 is standard throughout the State.

3. Austin Energy wants to upend our conservation-based rate design, that dates back to 1981. Why would we want to do that? Reducing the incentive to conserve would jeopardize the City’s adopted Climate Equity Plan. A “compromise,” to reduce the rate tiers from 5 to 4 might only reduce our conservation incentives by 20% or so. But why cut back on conservation at all?

4. Austin Energy said they need a base rate increase because of declining energy sales. But their own charts, presented to the City Council at the very beginning, don’t back up that claim. The only years where costs exceeded revenues were 2020 and 2021. Well, duh, we had a 100-year pandemic and a highly unusual winter storm. Of course less energy was sold, but only in those two years.

5. Now, here’s the clincher. In 2022, this year, Austin Energy sold more electricity from mid-May through mid-September, than in any other summer season in their entire history. And, they are still insisting that they need a rate increase? What’s up with that?? Well, apparently, they spent that huge summer surplus, without a required budget amendment being approved by the City Council. The public deserves to know the base revenue amount of that surplus, and how those un-budgeted funds were spent.

6. Austin Energy sprang a last-minute surprise on the City Council in late October. We got a double dose of rate shock for fuel and regulatory charges on Halloween at midnight.

7. One final important note – The so-called $15 increase in the “average” customer’s bill for the fuel and regulatory charges is mythical. It is only that low if you use 860 kWh per month. Try going that low in a 3-bedroom house in the sweltering July heat. So, obviously, if the City Council approves a third round of rate shock, be careful with the “average user” cost estimate. It might be as lowball as another $15.00. Well, for starters, even $30.00 more per month is tough to swallow during an affordability crisis. So, just imagine the actual, much higher costs for a 3-bedroom homeowner, in every neighborhood across the City!

This Is Not Rocket Science…

It just requires you to stand back and look at that big forest in front of you. Don’t get bogged down in all of those confusing trees. No other Central Texas electric utility is asking for radical, controversial changes to their rate structure. And they are not asking for a base rate increase. They are getting along just fine, with the historic summer heatwave providing a nice revenue cushion.

What Austin Energy does badly need is a big reality check. Austin’  hard-working residents and small business owners deserve much better transparency and accountability. Because, after all, we are the folks who own Austin Energy!

Musical Accompaniment for This Blog Piece:

1. “A Walk In the Black Forest” – Horst Jankowski
2. “A Walk In the Black Forest” – Rare vocal version by the Modernaires
3. “Tall Tall Trees” – Alan Jackson, Excellent George Jones cover version
4. “Tall Oak Tree” – Dorsey Burnette, Stereo version
5. “I Fell In Love Again Last Night” – The Forester Sisters

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